Legislature asked to act on federal health care law

DEAN OLSEN

Thursday

Aug 25, 2011 at 12:01 AMAug 25, 2011 at 9:57 AM

SPRINGFIELD -- The General Assembly needs to decide by the end of the year how Illinois’ health-insurance exchange will be set up in order for the state to receive full federal startup funding through the Affordable Care Act, a state official told lawmakers Wednesday.

SPRINGFIELD -- The General Assembly needs to decide by the end of the year how Illinois’ health-insurance exchange will be set up in order for the state to receive full federal startup funding through the Affordable Care Act, a state official told lawmakers Wednesday.

Kate Gross, assistant director for health planning at the Illinois Department of Insurance, said Gov. Pat Quinn’s administration wants the legislature to pass a bill in the fall veto session that outlines how an insurance exchange would be governed and funded.

That would give the state enough time to submit its plan for the exchange to federal authorities by late June.

The plan is needed for Illinois to qualify for millions of dollars of additional federal funding that will help the state prepare for the Jan. 1, 2014, launch of a health-insurance exchange, she said.

Tight timetable

“The timing is tight,” Gross said. “There’s a long way to go, but we’ve done a lot of the leg work so far.”

The exchange will create a centralized marketplace through which individuals and small businesses can buy affordable private health coverage, she said. The exchange also will include an online portal that will be used by people to qualify for Medicaid.

Gross was one of several people who addressed the Illinois Health Benefits Exchange Legislative Study Committee. The 12-member panel of Illinois House and Senate members was created by a state law that calls for the panel to make recommendations to the General Assembly by Sept. 30.

The committee held its first meeting Wednesday in Chicago and plans to hear testimony from the public next week in Springfield.

It is expected to recommend whether the exchange will operate through an existing or new state agency, a separate not-for-profit organization or a quasi-governmental entity.

The committee also is expected to suggest whether the exchange, which federal law says must be self-supporting, should be funded through a new tax on insurance companies, surcharges paid by people who use the exchange, or some other method.

States that operate their own exchanges are required to begin enrolling people by Oct. 1, 2013, so coverage can begin in January 2014, Gross said.

Illinois so far has received $6.1 million in federal funding to launch an exchange, she said.

Coverage expansion

About 1 million of the 1.5 million Illinoisans without health insurance are expected to gain coverage through the federal health-care law’s scheduled expansion of Medicaid eligibility in 2014 and through health-insurance exchanges in every state, said Mike Koetting, deputy director of the Illinois Department of Healthcare and Family Services.

Up to 700,000 uninsured people in Illinois are expected to join the Medicaid rolls. Several hundred thousand more uninsured are expected to gain coverage through the exchange.

One million or more people — including Illinoisans insured by small businesses in search of cheaper coverage — could get coverage through the exchange each year, Gross said.

A sliding scale of subsidies — to be funded 100 percent by the federal government — will make premiums more affordable for people with incomes between 133 percent and 400 percent of the federal poverty level (up to $43,560 a year for an individual and $89,400 for a family of four). People with incomes below 133 percent of the federal poverty level will qualify for Medicaid.

If the federal government reduces funding for the subsidies, the state wouldn’t have to pick up the tab, she told the committee.

Illinois is behind a handful of states in setting up an exchange, but ahead of states whose political leaders have held off on forming an exchange, according to Jon Kingsdale of Wakely Consulting Group.

Kingdale said officials in some states are hoping that the federal health-care reform law will berepealed after the November 2012 election.

If the law isn’t repealed, the federal government will operate exchanges in states that don’t create their own.

Dean Olsen can be reached at (217) 788-1543.

Next meeting

The Illinois Health Benefits Exchange Legislative Study Committee will meet at 1 p.m. Tuesday in the Illinois Capitol to hear testimony from the public. The tentative location is Room 114.

People wanting to testify are asked to contact Dan Long, executive director of the Commission on Government Forecasting and Accountability at (217) 782-5320 or dlong@ilga.gov.

On the web

More information on the Illinois Health Benefits Exchange Legislative Study Committee is available at http://tinyurl.com/benefitsexchange.

Benefit limits

The specific set of benefits that all health-insurance policies sold through health-insurance exchanges must offer hasn’t yet been outlined in federal rules. But the Affordable Care Act requires that all policies sold through the exchanges, and eventually all private policies in the United States, cover FDA-approved contraceptives and female sterilization procedures with no co-payments.

Accounting systems must be put in place to separate payments for subsidized premiums to ensure that federal funds aren’t used to pay for abortions. States cannot require that abortion coverage be part of the “essential benefits package” required for insurance plans in exchanges.

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